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New Member
posted Jul 5, 2020 10:08:02 PM

How to I declare money from people investing in my business?

In 2019 I received investments from 3 people in my business, how do I declare this? Is it counted as regular income?

0 3 1196
3 Replies
Not applicable
Jul 6, 2020 12:10:20 AM

if you have other 3 people investing in your business you

may

 have a partnership that requires the filing of form 1065 which was due 3/15/2020. knowing whether or not a partnership return needs to be filed depends on what their investment is.  if it's a loan then there should be loan documents specifying the terms including the interest rate.  if they're loans you don't have a partnership unless the "interest" they're to be paid is related to the profits. if it is a partnership, it's 5 months late. penalties are potentially in the thousands of dollars.  seek out a tax professional that can help you in the return preparation, what has to be done in the future, record keeping, and filing a request for penalty abatement.    the money from the investors is not income.   

Level 15
Jul 6, 2020 5:03:33 AM

I agree ... seek local professional assistance ASAP.

New Member
Jul 6, 2020 6:40:17 AM

Thank you. I'll get with someone asap. Hopefully it helps that we've had a loss.